Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

Archive for May 14th, 2013

The cynicism of the so called revolution never ceases to amaze me. While away, I have been trying to follow the latest corruption scandal unveiled by the the US SEC in which some relatively minor officials in development bank BANDES managed to rip off US$ 66 million by performing artificial trades with bonds owned by BANDES. In one trade, for example, one hundred million dollars in bonds were sold and repurchased on the same day by BANDES, except that by the end of the day, BANDES had lost ten million in commissions, while the bonds still had the same price. The SEC is asking that all the “profits” be returned and has charged the individuals as well as the companies that funneled the kickbacks to a BANDES official.

Some of the transactions were somewhat comical, as the broker had to ask the BANDES official to return to him the money he paid in taxes, as he reported the gains as income. Showing there is little honor among thieves, he actually under reported his gains to his BANDES crony in order to pay her less in kickbacks.

But like so many other corruption cases in the last fourteen years, the Government’ policy is to ignore the case. The Prosecutor has been silent on the case, so has the Minister of Finance, the Minister of Planning who oversaw BANDES at the time and least of all the President. Maduro has said nothing of the money stolen from the people by these so called revolutionaries.

But the Prosecutor is the worst one as she is so quick to prosecute opposition figures for small amounts spent by them arguing obscure irregularities under budgetary laws.

The amazing thing is that these are minor officials who managed to do this scam, but they made off with US$ 66 million just like that. Recall that BANDES is the bank that gets the loans from the Chinese, money that is spent with no transparency or accountability. I dont even want to think what goes on in there!

You have to add this BANDES case to Maletagate, Illaramendi, the check in the hands of an Iranian for 40 million euros, all cases discovered abroad but never investigated or even discussed in Venezuela. But the largest of these cases, all discovered abroad, is “only” half a billion dollars, small scale in revolutionary terms. Nobody knows how much money was made selling the seven billion dollars in Argentinean bonds, or who received over thirty billion dollars in Pdvsa bonds or about twenty more billion in sovereign ones, all of them assigned using ever changing rules and with zero transparency or accountability. To say nothing of the billions fed to the swap market by the Government while it allowed it to exist until 2010.

. Or try to imagine the US$ 100 billion spent by Fonden under the same careless watch of Jorge Giordani! Or the billions stolen in the 2009 banking crisis, whose main Bolivarian actors, including Jesse Chacon’s brother, have now been quietly freed.

But the corruption beat goes unabated under revolutionary watch. While the opposition is blasted for its capitalism, capitalist greed and corruption is alive and doing extremely well under Maduro and inside his Government, slightly better than under Hugo Chavez. And allowing it to go on unpunished simply promotes the audacity of those involved. Billions of dollars have been robbed in the name of the revolution and there is nothing there to stop them.